Tesla is known for its cutting-edge automotive technology and innovative designs, but how does that translate to its performance as an insurance company? The company offers coverage on its vehicles in 12 U.S. states. It may cover non-Tesla vehicles if the policyholder or applicant owns at least one Tesla vehicle covered under Tesla car insurance.
Whether you're a current Tesla owner or considering purchasing one in the future, this review will provide valuable information to help you understand the ins and outs of insuring one of these unique vehicles.
- Tesla Insurance Pros and Cons
- Tesla Insurance Plans and Offerings
- Tesla Insurance Pricing
- Tesla Insurance Financial Stability
- Tesla Insurance Accessibility
- Tesla Insurance Customer Satisfaction
- Tesla Insurance FAQ
- How we Evaluated Tesla Insurance
- Summary of Money's Tesla Insurance review
Tesla Insurance Pros and Cons
- Pay based on your driving habits
- Competitive pricing
- Always reevaluating their vehicles and insurance
- Using autopilot increases premiums
- Bundling discounts are less than ideal
- Not enough claims experience
Pay based on your driving habits
One of the main benefits of Tesla's insurance plans is that your insurance bill will depend on your driving habits. Your monthly premium will be calculated based on an in-vehicle driver performance monitoring system. It will track things like your relative speed, quick stops and starts, collisions and more. This data is used to calculate a driver’s Safety Score. The Safety Score is an algorithm that Tesla has developed using more than eight billion miles of fleet data and aligns driver behavior with the chances of a collision or on-the-road incident.
Your Safety Score is the result of many facets of your driving behavior. If you drive unsafely by following other vehicles too closely, turning corners sharply, hitting the brakes too hard or driving mostly at night negatively impacts your score because your behaviors are more likely to cause an accident. They also consider how many miles you drive, where you live, what type of coverage and vehicle you have and how many vehicles you’ve insured with them.
Tesla says its pricing is competitive partly because premiums are based on your driving habits, tracked as you drive. Tesla also claims that its advanced safety features, such as automatic emergency braking and lane departure warning, reduce the likelihood of accidents and associated claims. Because Tesla cars have strong safety ratings, the company states that it can offer lower premiums.
It’s always good to shop around for your best insurance deal, but Tesla Insurance claims to provide more competitive pricing than traditional insurance options, and if you drive safely according to the unique Safety Score technology, it can further reduce your auto insurance cost even from month to month.
Always reevaluating their vehicles and insurance
Tesla's Model S and Model Y received best-in-class safety ratings from Euro NCAP for 2022. According to a search on the National Highway Traffic Safety Administration (NHTSA) website, Tesla vehicles regularly scored 5-star ratings across the board for safety in frontal, side and rollover collisions. The company has also transitioned to underwriting its own insurance.
Using autopilot increases premiums
Unfortunately for users of the technology, autopilot is considered a higher-risk feature and might be considered a factor for a greater risk of accidents. The insurance industry is still figuring out where to place liability in incidents involving self-driving vehicles. Repairs and replacements for vehicles with this technology can also be more costly.
Additionally, the NHTSA recently issued a recall to Tesla for issues with its self-driving features, including vehicles running stop signs and failing to adjust for speed limit changes. In this way, automated driving increases the potential for accidents as drivers often fail to pay attention when a vehicle is on autopilot. As a result, insurance companies may charge higher rates for drivers who use it. You can avoid this by simply avoiding its use completely.
Bundling discounts are less than ideal
When taking out Tesla Insurance, bundling is limited to maintenance and service packages for the vehicle and discounts for covering multiple vehicles, though only one of them has to be a Tesla. You can’t, for example, bundle your Tesla auto insurance with a homeowner's or renter's insurance policy.
Not enough claims experience
Recently, the company has begun underwriting its own insurance policies. Because it's a relatively new offering, Tesla General Insurance might not have the legacy claims data that older and more established companies might use to drive claims pricing and track claims trends.
Tesla Insurance Plans and Offerings
Tesla claims that its insurance plans launched in 2019 are designed to provide coverage at more affordable rates than traditional insurance options.
The company allows you to purchase, manage and analyze your policy through the Tesla App, though you can also call their customer support team to help you with these processes. Getting a quote and applying for and purchasing a policy is a quick process, also facilitated by the Tesla app.
There are several types of Teslas vehicle models:
- Model 3 sedan
- Model Y sedan
- Model S luxury sedan
- Model X SUV
Tesla insurance offers coverage specific to each model with associated insurance for each model, including liability, collision, comprehensive and uninsured motorist protection. The company also offers add-on options such as glass and rental car coverage.
Tesla Insurance Pricing
Every driver wonders how much car insurance is and how the prices compare. Insurance prices vary greatly based on your car’s model coverage limits chosen and your driving history. Comparing quotes from multiple insurance providers is always a good idea. Quotes should be based on the same coverage, deductible and coverage limits. Be sure to investigate available discounts for any policy you’re considering. They can sometimes reduce your costs significantly.
Tesla states that because it understands its own technology, safety and repair costs, it can eliminate traditional insurance companies’ additional charges and provide a similar or better service at a lower price.
How much is Tesla Insurance a month? Tesla Insurance uses an in-house safety score system to measure your driving safety. Any new policy automatically starts with a score of 90 for the first 30 days. Your premium is based on an average of your daily safety scores over the last 30-day cycle.
At the end of every trip, you’ll get feedback on your real-time driving behavior, which updates your safety score and adjusts your premium. If your safety score increases, the amount you owe for your premium for the upcoming month will decrease. Conversely, if your in-vehicle app reports poor driving behavior associated with the criteria that make up your safety score, you'll likely see a bump in your premium total until your safety score improves.
Tesla claims its insurance policies will insure its vehicles at 20% to 30% less than other insurance companies. To further reduce costs, you can get a 12% discount on your premium by insuring more than one vehicle with Tesla Insurance, whether it's another Tesla or not. You must have at least one Tesla vehicle covered under the company’s insurance to be eligible for coverage for non-Tesla vehicles.
Unlike other car companies, Tesla does not consider your marital status, gender or credit history. They also do not penalize you for past accidents, preferring to focus on how your driving is currently.
Tesla Insurance Financial Stability
Tesla is a public company listed on the NASDAQ. Its financial stability is excellent, with a strong balance sheet and consistent revenue growth. The company is currently valued at more than $535 billion. However, as with any publicly traded company, its financial stability can be affected by many factors, including changes in product demand, competition and economic conditions.
When it was first launched, Tesla's auto insurance was underwritten by another provider. However, the company began underwriting its own insurance policies in late 2022. This is an indicator of Tesla's financial stability, as self-underwriting shows confidence in the company's ability to adequately finance claims for its drivers.
Tesla Insurance Accessibility
Tesla Insurance is available to Tesla owners in 12 states.
As of May 2023, Tesla Insurance is only available to Tesla vehicle owners in the states listed below:
*Insurance coverage using real-time driving behavior is not available in California.
Potential customers can only contact this provider via phone by calling 1-844-34-TESLA or by going to its website.
Current policyholders can contact Tesla to make a claim via a mobile app or by calling in a claim report. Tesla insurance cards and payments are also available in the app. There are currently no other online options to access your policy information.
Tesla vehicles have consistently been rated as having the best user experience among car brands by a wide margin. Unfortunately, online reviews from car enthusiasts and Tesla owners speak more to the business's auto side than its insurance subsidiaries.
The user experience of purchasing, using and maintaining Tesla insurance is fairly simple and straightforward. The company's website and app are mobile-responsive. Links to purchase insurance and file claims are prominently featured under the "Menu" section. The site and app cleanly outline the insurance options and how to begin the purchase process.
Tesla Insurance Customer Satisfaction
Reviews of Tesla insurance are limited, but a relatively common complaint is that they’re helpful while you’re trying to get the insurance, but once you have it, their level of service plummets. Reviewers on insurance feedback sites say the sales agents are responsive and helpful, but once the policy is purchased, response times are sometimes longer than they should be to answer questions or complete a claim.
Another complaint is that their relative inexperience in the insurance industry means some of the staff's understanding of Tesla's insurance and broader insurance products is poor. Some reviewers have noted that Tesla's support staff doesn't have the answers they need to respond to complex customer insurance questions, both specific to Tesla and in reference to the greater automotive insurance industry.
If you’re considering signing up for insurance with Tesla, it’s essential to conduct some research before you do. Also, make sure you research the service in your area, as it can give you a better idea of the kind of support you can expect.
Tesla Insurance FAQs
Who underwrites Tesla Insurance?
Why is insurance on a Tesla expensive?
Tesla cars are typically considered luxury vehicles and traditional insurance companies often consider them more costly to repair. The price to repair a luxury vehicle can be high because it can be difficult to get replacement parts, for example. It could be hard to find mechanics with the unique knowledge needed to fix a luxury vehicle and these vehicles might be a more ready target for theft or vandalism.
Do you have to have insurance on your Tesla?
How we Evaluated Tesla Insurance
We used various online resources and customer feedback to compare Tesla Insurance with other insurance options in the market. For this review, we focused on:
- Available coverage options
- Pricing information
- Customer reviews and experience
- Tesla insurance accessibility and availability
It's important to note that while we aim to provide accurate and up-to-date information, it may not be exhaustive or entirely current. You should always conduct your own research when looking into any insurance options.
Summary of Money's Tesla Insurance Review
The coverage options provided by Tesla Insurance are adaptable and the company offers various options to suit the unique needs of Tesla owners. Tesla Insurance can be purchased online and claims can be made through their app.
Tesla Insurance offers a range of coverage options, including basic liability coverage and collision and comprehensive coverage. It offers discounts and other incentives for Tesla owners to help make coverage more affordable. It may not be one of the best auto insurance options available, but the specific benefits offered to this unique type of vehicle make it a compelling choice for the Tesla driver.